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The common organisation of the market in wine seeks to achieve a better balance between supply and demand within the EU and make the EU wine industry more competitive in the long term. It has financed the restructuring of large areas of vineyards to align supply with demand.

ACT

SUMMARY

The common organisation of the wine market established by this Regulation seeks to maintain a better balance between supply and demand on the Community market, allowing producers to take advantage of expanding markets and the sector to become more competitive in the longer term.

It also aims to eliminate the use of intervention as an artificial outlet for surplus production, maintaining all traditional outlets for potable alcohol and vine-based products, accommodating regional diversity and recognising the role of producer and interbranch organisations.

A final objective is to simplify considerably the legislation in this field, as part of the general drive to clarify the common agricultural policy (CAP) that was launched in 1995 and reiterated in Agenda 2000.

The Regulation maintains the principle of a prohibition until 31 July 2010 on the planting of vine varieties classed as wine grapes, unless carried out in accordance with a new planting right, a replanting right or a planting right granted from a reserve.

New planting rights are granted by Member States to producers for certain areas. Additional rights may also be granted up to a maximum amount set for each producing country. However these rights are available only to Member States that have drawn up the inventory provided for in the Regulation to help manage wine potential. Until 31 July 2003, additional rights were also granted for areas to produce certain wine where production was lower than demand.

Replanting rights are granted by Member States to producers who have grubbed up, or have undertaken to grub up, an area of vines within a period of three marketing years. In principle, these replanting rights are exercised on the holding in respect of which they were granted. The period for making use of these rights ranges between five and eight years, depending on individual cases.

New planting rights and replanting rights only apply to Member States in which wine production does not exceed 25 000 hectolitres per marketing year.

The Regulation establishes a system of reserves of rights, which are set up by the Member States and are made up of newly-created planting rights and rights that are not used within the time-limits laid down. These rights may subsequently be granted to young growers and, against payment, to other producers. A Member State may choose not to apply the reserve system as long as it can prove that it has an efficient system for managing planting rights.

An abandonment premium, the amount of which is fixed by the Member States, may be granted in return for the permanent abandonment of wine-growing on a particular area. In such cases, the producer forfeits any replanting rights in respect of the area for which the premium is granted. However, certain areas do not qualify for this premium (Article 9).

A system for the restructuring and conversion of vineyards has been established with the aim of adapting production to market demand. Only regions in a Member State which has compiled an inventory of production potential (Article 16) may benefit from the system. Support may be granted under this system only if a plan is drawn up and it is approved by the Member State. Support takes the form of compensation to producers for loss of revenue and a contribution towards restructuring and conversion costs. Except in regions classified as Objective 1, the Community contribution does not exceed 50%.

Market mechanisms

An aid scheme has been introduced to assist producers with the private storage of table wine, grape must, concentrated grape must and rectified concentrated grape must. The aid is granted subject to the signing with intervention agencies of a long-term storage contract, which is in turn subject to certain conditions.

A number of provisions cover distillation. The overpressing of grapes, the pressing of wine lees and the re-fermentation of grape marc for purposes other than distillation are prohibited. In such cases, persons in possession of these by-products are obliged to deliver them for distillation. The distiller must pay a minimum price for these products and may, subject to certain conditions, receive aid or deliver his alcohol to the intervention agency. The same distillation scheme applies to wine produced in excess of the normal quantity from a grape listed in the classification as both a wine-grape variety and a variety for use for another purpose.

The Community may also provide support for the distillation of table wines in order to underpin the wine market and accordingly help maintain supplies of the products of wine distillation to the potable alcohol sectors which traditionally use such alcohol (wine spirits and liqueur wine). Support in these cases takes the form of primary aid (aid to distillation against the payment of a minimum price by the distiller to the producer) and secondary aid to cover the cost of storing the resulting product. In addition, a voluntary crisis-distillation measure may be implemented if there is an exceptional case of market disturbance caused by serious surpluses or quality problems. The purpose of this crisis measure is to eliminate specific pockets of surplus and ensure supply continuity from one harvest to another.

Aid may be granted for specific purposes, such as the use of concentrated grape musts and rectified concentrated grape musts produced in the Community. The amount of aid is fixed so that the cost of supplying products for which aid is received remains appropriate given their traditional markets.

Producer organisations and interbranch organisations

The Regulation devotes a Title to producer organisations and interbranch organisations and endows these organisations with a Community legal basis.

A producer organisation is taken to mean any legal entity which is formed on the own initiative of producers and has the aim of:

ensuring that production is planned and adjusted to demand;

promoting concentration of supply and the placing on the market of their products;

reducing production costs and stabilising producer prices;

promoting the use of environmentally-sound growing and production techniques.

Member States may, on certain conditions, recognise such organisations as producer organisations within the meaning of the Regulation.

Where interbranch organisations are concerned, Member States may, subject to certain conditions, define marketing rules aimed at regulating supply. The Member States concerned must also send an annual report to the Commission on any decisions taken in this connection. The Commission checks whether they comply with Community law. Interbranch organisations may engage in a number of activities as long as they bear consumers' interests in mind.

A list of authorised processes and practices (enrichment, acidification, deacidification, sweetening, etc.) is given in Annexes IV and V. These practices may be used only for the purpose of ensuring proper vinification, proper preservation or proper refinement of the product and may be subject to stricter national conditions. The addition of water and alcohol is excluded from authorised practices, except in certain cases. Vinification of imported must is prohibited, as is the blending of a wine from a non-EU country with a Community wine, except where an exemption is granted in accordance with international requirements. The Regulation also lists a number of products which may not be offered for direct human consumption, such as imported products which have undergone oenological practices not authorised by Community rules (Article 45).

The rules relating to the description, designation and presentation of products and to the protection of certain indications, terms and expressions are set out in Title V, Chapter II of the Regulation and in Annexes VII and VIII. These rules are targeted at protecting consumers' and producers' interests, ensuring the smooth operation of the internal market and promoting the production of quality products. Products which do not meet these requirements may not be put on the market within the Community or - unless an exemption is granted - exported. These rules cover terms which must be used, terms which may be used subject to certain conditions and other expressions, particularly those which impart information likely to be of use to consumers.

Quality wines produced in specified regions (quality wines psr)

Quality wines psr cover liqueur wines (quality liqueur wines psr), sparkling wines (quality sparkling wines psr), semi-sparkling wines (quality semi-sparkling wines psr) and quality wines psr other than those mentioned. The Regulation introduces a common set of rules for the production of these wines. Only certain products are suitable for yielding a quality wine psr and a number of production rules, mentioned in Annex VI, must be respected. The Member States must send the Commission a list of the quality wines psr which they have recognised (list of quality wines published in 2007 (PDF)). The provisions also provide for the possibility of downgrading quality wines psr which no longer meet certain requirements (such as adhering to a maximum yield per hectare).

Trade with countries outside the EU

Imports into the Community of products covered by the Regulation are subject to the presentation of an import licence, which is issued by the Member States to any applicant. Licences are valid throughout the Community.

In principle, the rates of duty in the Common Customs Tariff apply to these products. For juice and grape must, application of the Common Customs Tariff, which consists of an ad valorem duty and an additional duty based on the entry price, requires the actual amount of the import price to be verified, either by checking every consignment or by using a flat-rate import value (Article 60). In order to prevent imports of certain products having adverse effects and subject to compliance with the rules of the World Trade Organisation, an additional import duty may be imposed (Article 61).

The Regulation also contains provisions on tariff quotas, export refunds and the measures that apply to trade with non-EU countries in the event of serious disturbances deriving from imports or exports, contrary to the objectives of the CAP, as laid down in Article 33 of the EC Treaty.

General, transitional and final provisions

The products covered by this Regulation may be placed on the market within the Community only with an officially checked accompanying document.

Member States designate one or more authorities which are responsible for ensuring compliance with Community rules in the wine sector. The Commission forms a body of inspectors to participate in on-the-spot checks. Member States also appoint laboratories that are authorised to carry out official analyses in this sector.

The Regulation sets up a Management Committee for Wine consisting of representatives from the Member States and chaired by a Commission representative. However, following adoption of the single CMO the Committee will be abolished in August 2008 and its tasks will be carried out by the Management Committee for the Common Organisation of Agricultural Markets.

The Regulation contains eight Annexes relating to:

definitions of product terms and, in particular, of the different types of grape must and wine (Annex I);

the description, designation, presentation and protection of certain products other than sparkling wines, by way of obligatory and optional information, expressed in the language which may be used for labelling, as well as codes and brand names (Annex VII);

These discussions led to the adoption of Regulation (EC) No 479/2008, which enacts a major reform of the common organisation of the market in wine. Regulation (EC) No 1493/1999 was repealed as from 1 August 2008.

RELATED ACTS

The major reform of the common organisation of the market in wine enters into force on 1 August 2008. It is based on a desire to enhance the competitiveness of European wines, balance supply and demand, remove market intervention measures, improve the use of budgetary allocations, simplify the regulations, strengthen the social fabric in rural areas and protect the environment.

Regulation (EEC) No 357/79 [Official Journal L 54, 5.3.1979]The above Regulation concerns statistical surveys that Member States must conduct on areas under vines of at least 500 hectares. These surveys must be carried out every ten years. In addition, annual interim surveys gather information on any changes made.See consolidated version (PDF).

Analysis methods

Regulation (EEC) No 2676/90 [Official Journal L 272, 3.10.1990]The above Regulation sets out the Community analysis methods applicable to the wine sector to establish the composition of wine sector products.See consolidated version (PDF).

Report from the Commission to the European Parliament and the Council on management of planting rights pursuant to Chapter I of Title II of Council Regulation (EC) No 1493/1999 [COM(2007) 370 final – Not published in the Official Journal].

The above report collects and explains planting rights data for 2000-2006. With a series of tables and diagrams it shows the new planting rights granted and the countries concerned. In addition, it evaluates potential Community production. The report is of a purely statistical nature and not does contain any political conclusions. However, the reorganised data it presents will be a valuable asset for the next wine market reform.